◆ Inside the Latest Quarter (Q2 2026)

GE Aerospace (GE) — the variant view

Revenue up twenty-one per cent, margins down 160 basis points, and both facts have exactly the same cause.

📈 GE valuation, revenue & earnings — P/E, P/S, revenue, EPS →

GE Aerospace reported revenue of $13,349 million for the June 2026 quarter, up twenty-one per cent, with continuing earnings per share of $2.30 against $1.87 and cash from operating activities of $3,258 million, up thirty-nine per cent1. Free cash flow was $3,027 million, up forty-three per cent2. Adjusted earnings per share were $2.02, up twenty-two per cent3.

Q2 2026: revenue up, margin down, both for the same reason13,349Revenue $m659Engines delivered27.3%CES margin %3,027Free cash flow $mA year earlier: $11,023m, 525 engines, 28.9% and $2,120m. Guidance was raised across the board.
Revenue up twenty-one per cent and margins down 160 basis points, because the company sold more engines.

And the margin fell. Profit margin was 21.0%, down seventy basis points; operating profit margin 21.7%, down 130 basis points; and Commercial Engines & Services 27.3% against 28.9%, down 160 basis points4. The company's explanation is one sentence and it is the whole business model: margins contracted from install engine growth, including the GE9X, investments and inflation5.

That is the razor-and-blade structure showing up as a headwind. Commercial engine deliveries rose from 525 to 659 in the quarter, LEAP deliveries up twenty-four per cent, and total engine deliveries grew thirty-one per cent in the first half6. Every one of those engines is sold at a gross loss7. Selling more of them lowers the reported margin now and raises the annuity later.

The annuity half of the quarter was excellent. Commercial services revenue grew twenty-six per cent, internal shop visit revenue twenty-five per cent and spare parts revenue more than twenty-five per cent, with record internal shop visit output8. Orders rose eighteen per cent in the quarter and Commercial Engines & Services orders fifty-two per cent in the first half9. Remaining performance obligation reached $210,790 million10.

Management raised guidance across the board: adjusted revenue growth to high teens, operating profit to $10.55-$10.75 billion from $9.85-$10.25 billion, adjusted earnings per share to $7.65-$7.85 from $7.10-$7.40, and free cash flow to $8.9-$9.2 billion from $8.0-$8.4 billion11. Larry Culp described a strong quarter and pointed at a backlog above $210 billion12.

Two other things happened that will matter later. The LEAP-1B durability kit was certified with an upgraded high-pressure turbine blade expected to deliver roughly two times the time-on-wing, with full cutover from the beginning of 202713 — better for the customer and fewer shop visits per engine. And after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act, the company submitted refund requests and received a portion of previously paid IEEPA tariffs14.

Next quarter turns on the same thing: whether shop visit revenue keeps growing faster than deliveries. It did in this one, which is why a quarter with falling margins was a good quarter.

References
  1. ReportedGE Aerospace reported revenue of $13,349 million for the June 2026 quarter, up twenty-one per cent, with continuing earnings per share of $2.30 against $1.87 and cash from operating activities of $3,258 million, up thirty-nine per cent.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  2. ReportedFree cash flow was $3,027 million, up forty-three per cent.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  3. ReportedAdjusted earnings per share were $2.02, up twenty-two per cent.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  4. ReportedProfit margin was 21.0%, down seventy basis points; operating profit margin 21.7%, down 130 basis points; and Commercial Engines & Services 27.3% against 28.9%, down 160 basis points.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  5. ReportedThe company's explanation is one sentence and it is the whole business model: margins contracted from install engine growth, including the GE9X, investments and inflation.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  6. ReportedCommercial engine deliveries rose from 525 to 659 in the quarter, LEAP deliveries up twenty-four per cent, and total engine deliveries grew thirty-one per cent in the first half.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  7. ReportedEvery one of those engines is sold at a gross loss.
    GE Aerospace Form 10-K, FY2025 - consolidated financial statements — statement of operations including sales of equipment, sales of services, insurance revenue and their respective costs; statement of financial position including insurance liabilities and annuity benefits, shareholders' equity, property plant and equipment and shares outstanding; and the statement of cash flows. — FY2025 · publ. January 2026 · source ↗
  8. ReportedCommercial services revenue grew twenty-six per cent, internal shop visit revenue twenty-five per cent and spare parts revenue more than twenty-five per cent, with record internal shop visit output.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  9. ReportedOrders rose eighteen per cent in the quarter and Commercial Engines & Services orders fifty-two per cent in the first half.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  10. ReportedRemaining performance obligation reached $210,790 million.
    GE Aerospace Form 10-Q for the quarter ended June 30, 2026, Management's Discussion and Analysis — consolidated revenue, profit and earnings per share, the segment results for Commercial Engines & Services and Defense & Propulsion Technologies, commercial engine and LEAP unit deliveries, internal shop visit revenue growth, the remaining performance obligation and its equipment and services split, the supply chain, tariff and Middle East discussions, and the planned $1 billion US manufacturing investment and 5,000 US hires. — Q2 2026 · publ. July 2026 · source ↗
  11. ReportedManagement raised guidance across the board: adjusted revenue growth to high teens, operating profit to $10.55-$10.75 billion from $9.85-$10.25 billion, adjusted earnings per share to $7.65-$7.85 from $7.10-$7.40, and free cash flow to $8.9-$9.2 billion from $8.0-$8.4 billion.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  12. ReportedLarry Culp described a strong quarter and pointed at a backlog above $210 billion.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  13. ReportedThe LEAP-1B durability kit was certified with an upgraded high-pressure turbine blade expected to deliver roughly two times the time-on-wing, with full cutover from the beginning of 2027 — better for the customer and fewer shop visits per engine.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
  14. ReportedAnd after the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act, the company submitted refund requests and received a portion of previously paid IEEPA tariffs.
    GE Aerospace second-quarter 2026 earnings release (Exhibit 99.1 to Form 8-K of July 16, 2026) — total company GAAP and non-GAAP results, segment revenue, orders and operating profit, free cash flow, the raised full-year 2026 guidance for adjusted revenue growth, operating profit, adjusted earnings per share and free cash flow, the LEAP-1B durability kit certification, the XA102 and GE426 defence programmes, the NASA hybrid-electric ground tests, and the chief executive's commentary. — Q2 2026 · publ. 16 July 2026 · source ↗
Sources
Generated September 23, 2026